CIPS Exam L4M8 Topic 1 Question 50 Discussion

Actual exam question for CIPS's L4M8 exam

Question #: 50
Topic #: 1

[All L4M8 Questions]

Describe three types of fraud that could occur within the supply chain of an organization with which you are familiar.

AExplanation:
Fraud occurs when a person acts deliberately to secure monies from another party through dishonest method. Within the supply chain of an organization, fraud can represent itself in the following ways:
1. Kickbacks: e.g. (commission given to a bribe taker for service perform)
2. Corrupt influence (e.g ordering more than what is required)
3. Collusion: (group of suppliers working together to submit multiple bids and split profit.
4. Bid Rigging (a contract is informally agreed with a chosen supplier prior to the official process
5. invoicing fraud
6. Substitution (submitting products that are below the required quality
7. False claims (files false document)
Case Study
A series of news stories reporting events such as the collapse of the Rana Plaza building in 2013 have drawn attention to the poor conditions in garment factories across India and South East Asi
a. Human rights groups have long be critical of the excessive hours and poor wages workers are forced to endure, as well as the abuse they receive from supervisor. With consumers becoming increasingly aware of these conditions, more pressure is being put on global brands and retailers to ensure their supply chains are fair and ethical.
Certain areas have been notorious for the mistreatment of workers. In India's textile valley', young women are been bound into contracts where they work for two to three years, in exchange for a lump sum of money that they can then put towards a dowry. This is known as the 'Sumangali [a married woman] Thittam' scheme. These women are forced to live in hostels under restrictions that prevent them from moving, and are denied the opportunity to improve their living conditions. Retailers including Walmart and H&M are known to source garments from factories in the 'textile valley'.
Reports by organizations including the Asia Floor Wage Alliance (AFWA), Central Combodia, Global Labor Justice, Sedane Labour Resource Centre (LIPS) Indonesia, and Society for Labour and Development (SLD) India have exposed unethically run factories that supply garments to H&M, Gap and Walmart. However, retailers will continue to benefit from expensive labour until mounting customers pressure causes them to change.

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Suggested Answer: A

by Alonso at Nov 18, 2024, 06:33 PM

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9 months ago

Substitution is the worst. Imagine getting a lower-quality product than what you ordered - that's a recipe for disaster. Might as well just buy from the dollar store!

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Benedict

8 months ago

User 3

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Benedict

9 months ago

User 2

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Mignon

9 months ago

User 1

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Albina

9 months ago

Invoicing fraud and false claims are just sneaky ways for suppliers to rip off the organization. They must think we're all idiots or something!

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10 months ago

Kickbacks and corrupt influence seem like the most common types of fraud in the supply chain. I've heard stories of suppliers trying to bribe procurement managers to get their products ordered.

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